Quality management and performance a review

International Journal of Advanced Research in Management (IJARM),
International Journal of 2010. pp. 01- 19
http://www.iaeme.com/ijarm.html
I J ARM
Volume 1, Issue 1, JuneAdvanced Research in Management (IJARM), Dr. Rajesh K. Singh
© IAEME

QUALITY MANAGEMENT AND PERFORMANCE: A
REVIEW

Dr. Rajesh K. Singh
Associate Professor
Indian Institute of Foreign Trade (IIFT), Delhi,
E-mail: rksingh@iift.ac.in
rksdce@yahoo.com

Abstract- In present scenario of globalization and economic slowdown, survival of
organizations has become a challenging task for the management. Customers expect high
product quality along with low cost, timely deliver and best service. In such a situation, total
quality management in the organization is very relevant. This paper has tried to explore different
issues affecting implementation of TQM, effect of TQM on performance and circumstances
under which TQM fails. One hundred twenty research papers, mainly from referred international
journals are reviewed to identify thrust areas of research. On the basis of review, gaps are
identified and research agenda is proposed. This paper has identified certain gaps from
literature on issues related with TQM such as development of framework for evaluating
effectiveness of TQM, prioritization of critical success factors, comparative study of TQM and
effect of TQM on performance of organizations from supply chain perspective etc on which
further study can be conducted.

Keywords- Quality, TQM, Performance

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International Journal of Advanced Research in Management (IJARM), Dr. Rajesh K. Singh

Quality Management and Performance: A Review
1. INTRODUCTION
Today, the wave of global competition has invaded every part of the world and business areas
(Koberg et al., 2003). The main impact of global competition is the ever-increasing enhancement
of customer expectations. Since customer expectations are never ending, the gaps between “what
customers want” and “what is being delivered” do ever exist. It is a well-established fact that
attaining higher and higher degrees of quality in totality paves the way for facing global
competition (Goh and Ridgway, 1994). Quality is the main driver for improving the
competitiveness of organizations in globalised market (Singh, 2008). A high degree of quality
means achieving, enhancing and sustaining competitiveness is dependent on delivering superior
quality products/services to customer (Lai et al., 2002; Reed et al., 1999). Arumugam et al.
(2009) have observed that companies experience dramatic changes in business environment
characterized by increasing consumer consciousness of quality, rapid technology transfer,
globalization and low cost competition. In response to these challenges, many companies have
joined the quality movement and implemented various quality improvement initiatives as a
means to enhance competitiveness (Singh et al, 2007). Quality has emerged as a strategic
competitive tool for organizational success (Yong and Wilkinson, 2002; Hansen, 2001). In
today’s business environment, organizations cannot afford to ignore the strategic implications of
quality for its competitive position. Many organizations, have pursued some type of quality
philosophy and initiative, for example, Total Quality Management (TQM), Just-In-Time (JIT),
the Shing Prize, Deming Prize and ISO 9000 (Magad and Curry, 2003). In global competition a
company needs to apply quality methodologies in the form of strategic quality management;
quality systems; quality assurance; quality control, etc (Sharma and Kodali, 2008).
Quality is customer satisfaction through product or by service. Quality can also be defined as
“the degree to which the product in use will meet the expectations of the customer” or simply
defined as “conformance to requirements”. Quality is an important factor in the value-adding
process involved in the production and delivery of products along the supply chain. Supply chain
management (SCM) and total quality management (TQM) are two of the important tools that
manufacturing companies use to achieve competitive advantage. Some of the important
capabilities that these companies seek to acquire through the use of these tools to be able to
compete effectively include quality, efficiency, and innovation (Daghfous, 2004). The
production of defect-free components and parts that meet the requirements of customers along
the supply chain is critical for the quality of the final products (Sila et al., 2006). Shrivastava
(1995) pointed that competitive advantage can be achieved by harnessing existing capabilities in
areas such as quality management.
Mostly in all TQM definitions reference is made to its “soft” and “hard” side (Vouzas and
Psyhogios, 2007). The “soft” side is associated with management concepts and principles such as
leadership, strategic quality planning, employee empowerment and culture, supplier
management, customer focus, process management, continuous improvement, information and
analysis and knowledge and education while the “hard” side refers to quality improvement tools
and techniques (Vouzas and Psyhogios, 2007; Thiagaragan et al., 2001). These tools and
techniques include flow charts, relations diagram, scatter diagram, control charts, pareto analysis,

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design process, statistical process control, quality function deployment, and other production and
quality improvement techniques. The “soft” TQM elements are long-term issues and therefore
must be emphasized and addressed accordingly in an organization’s TQM implementation plan.
The effective manipulation of the “soft” elements must be supported by the “hard” elements of
TQM (Zairi and Thiagarajan, 1997). Lagrosen and Lagrosen (2005) studied the effects of “soft”
TQM elements, quality management models and tools on performance. Fotopoulos and Psomas
(2009) have observed that quality improvement and the consolidation of the company’s market
position are influenced mainly by adopting “soft” TQM elements and secondarily “hard” TQM.
Douglas et al. (1999) also suggested that effective use of soft TQM practices (e.g. executive
commitment, employee empowerment, customer focus) can bring quality improvement.
Motwani et al. (1994) suggested the opposite, i.e. that quality success could be achieved by
increasing use of hard TQM (e.g. process control and supplier quality management). This paper
is organized as follows. Section 2 discusses about total quality management and various factors
on which its implementation depends, section 3 discusses TQM issues in SMEs, Section 4
discusses effect of TQM on organizations performance, Section 5 discusses TQM failures cases.
It is followed by summary and gaps and finally concluding remarks.

2. TOTAL QUALITY MANAGEMENT
In an increasingly competitive market-place businesses with a strong continuous improvement
culture and external focus are more likely to survive and prosper. Attaining a high level of
customer satisfaction usually requires more than providing a high-quality product (Hendricks &
Singhal, 1997). Total Quality Management (TQM) is considered an important catalyst in this
context. It emerged as a generic title for the process of quality improvement. Lagrosen (2001)
observed that TQM has become well established system for improving both the performance of
corporations and satisfaction of customers. According to Yang (2005), TQM is an integrated
management philosophy and a set of practices that emphasizes, among other things, continuous
improvement, meeting customer’s requirements, reducing rework, long-range thinking, increased
employee involvement and team-work, process redesign, competitive benchmarking, team-based
problem-solving, constant measurement of results, and closer relationships with suppliers.
The primary focus of total quality management (TQM) is customer satisfaction.
According to Ho’s (1999), every one in TQM organization, including the customers and
suppliers is involved in continuous improvement for the purpose of meeting customers’
expressed and implied requirements with the full commitment of top management. According to
Ehigie and McAndrew (2005), TQM attempts at improving quality of product and processes of
organizations. Hellsten and Klefsjo (2002) and Hansson and Klefsjo (2003) also define TQM as
a continuously evolving management system, which is consisting of values, methodologies and
tools and the aim of which is to increase external and internal customer satisfaction with a
reduced amount of resources. TQM is a customer focused management philosophy that aims at
the continuous improvement of the processes and management of an organization through
statistical control, procedure design, policy deployment and human resource management
techniques (Au and Choi, 1999). According to Sharma and Kodali (2008), the concept of TQM
provides the approach to realize the manufacturing strategy leading to fulfillment of corporate
strategy. The principles and contents of TQM philosophy would increase firm’s commitment to
quality and if they are applied correctly enhances the firm’s competitive position. This is because
the TQM principles support the business practices of cost reduction, enhanced productivity and
improved quality of the products/outputs. It clearly shows that TQM is not a model or a
technique, but may best be described as a management philosophy (Dale, 1999; Neergaard,
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2002). The methods and techniques used in TQM can be applied throughout any organization.
They are equally useful in the manufacturing, public service, health care, education and
hospitality industries.
Hellsten and Klefsjo (2002) state that TQM consists of three components. These are core
values, techniques and tools. Techniques and tools are supposed to support the core values.
According to Flynn et al. (1995), TQM practices could be divided into two independent groups.
The first is ‘core quality management practices’, which are expected to contribute to quality
performance directly. The second is ‘quality management infrastructure’ practices, which are
proposed to support and facilitate the effective use of core quality management practices.
Samson and Terziovski (1999) lead to the identification of nine practices that are commonly
cited as part of a TQM program. These practices are cross-functional product design, process
management, supplier quality management, customer involvement, information and feedback,
committed leadership, strategic planning, cross-functional training, and employee involvement.
Some of the important factors affecting implementation of TQM such as leadership/top
management support, organization culture, human resource management, customer orientation,
information technology, supply chain management, ISO 9000 are discussed in following
sections.

2.1 Leadership/Top Management Support
The ISO 9001 standard defines top management as a person or group of people who direct and
control an organization at the highest level (ISO, 2000). The main objective is to create an
environment where people are fully involved and in which a quality management system can
operate effectively and make recommendations to achieve this objective. Top management
leadership capabilities not only affect TQM implementation but also improve other
organizational activities. It is essential for management to commit to their leadership and
participate actively in the formulation and finalization of strategy (Pun, 2001). Top management
has to be sincere and candid about why a practice like TQM is needed and must earn the respect
and trust of the employees before and during the implementation process. Top management
support to quality management is an absolute precedence for preparing organizational culture
before TQM practices can be implemented (Antony et al., 2002). Top management can facilitate
the unity of purpose as well as change process management and learning processes (Ahire et al.,
1996; Hamlin et al., 1997). According to Lewis et al. (2005), top management support or
commitment can be divided into four factors for effective implementation of TQM. These factors
are strategy finalization, resource based strategy, environmental focus and quality culture. Top
management could use resource based strategy to create a “sustained” competitive advantage if
their resources (or capabilities) are valuable, rare among competitors, imperfectly imitable and
not easily substitutable (Barney, 1991). Through a quality culture, employees can interactively
create and preserve a social order within the company. It provides the company with some
measure of control over the business processes (Pun, 2001). Raghunathan et al. (1997) noticed
that leaders play an important role in how TQM practices are projected in a consistent manner
where it affects organizational performance and profitability. In a TQM framework, leadership
and top management support element can be positioned at the soft side.

2.2 Organizational Culture
Organizational culture is a pattern of values, beliefs, and assumptions shared by members in an
organization, which are perceived by the organization as the valid, correct way to perceive and
solve problems (Sigler and Pearson, 2000). In the quality management, the values and beliefs
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underlying an organization’s culture are able to shape its philosophy and policies of managing
business, which in turn influence the development of the organization’s quality management
practices (Waldman, 1993). TQM is a management approach in which the application of
practices such as teamwork, internal customer relationship and supplier partnership are tools for
cultural transformation and involves a major cultural change in the organization. TQM is a
complete change in an organization’s culture and the way people behave at work. On the other
hand, organizational culture appears to be a crucial factor in understanding the ability of any
organization to perform and compete. In organization, managers are contending with rapid
changes in technology, shorter product life-cycles, new markets, and a demand for higher quality
products (Chowdhury and Menon, 1995). Managers for changing organizational culture have to
change their management style, from an authoritative to a participative management style to
achieve continuous improvement through their employees. To achieve success in TQM, senior
managers need to ensure that all facets of the organization, the organizational structure,
management style, training, communications, compensation and promotion systems, and
systems, procedures, and processes reflect TQM values and principles (Rad, 2006). Companies
trying to gain a competitive edge in this marketplace have realized the importance of raising the
quality of goods and services, and have implemented programs such as TQM (Total Quality
Management). Total quality management focuses on a continuous improvement process with an
emphasis on people and their involvement and receptivity to continuous change. Thus, TQM is
an integrated effort for gaining competitive advantage by continuously improving every fact of
an organization’s activities (Mohamed and YuanJian, 2008).
TQM practices are significantly influenced by the organization culture and each dimension of
organization culture is related to TQM in different fashions. For instance, power distance
influences all the TQM elements, but masculinity has positive impact on business performance
of TQM practice only (Jung et al., 2008). TQM requires an organization culture where all
individuals are concerned with quality; want to produce quality products, and where they can
freely question practices that do not produce quality. The study of TQM from a cultural
perspective pursues the understanding of the cultural dimensions of TQM discipline. The focus is
on understanding the role of organizational culture in the TQM implementation process. TQM
emphasizes the importance of corporate culture and uncovering current underlying cultural
assumptions as primary condition for successful TQM implementation (Mohamed and YuanJian,
2008).
Hofstede (1980) identified four factors on which culture of different countries differ. The four
factors are collectivism-individualism, power distance, uncertainty avoidance and masculinity
feminity. Kanungo and Mendonca (1996) have added an additional factor i.e. associative
thinking-abstractive thinking to these factors for defining the culture of developing countries like
India. Lagrosen (2002) studied in European survey that two dimensions of culture – power
distance and uncertainty avoidance affect the approach taken for implementation of TQM.
Empowerment and participative management are important for TQM implementation in Indian
organizations (Wali et al. 2003). According to Kumar and Sankaran (2007), collectivism and
hierarchy are two important factors for effective implementation of TQM concept in Indian
culture.

2.3 Human Resource Management (HRM)
HRM practices include training and education, incentive compensation and employee
development. HRM can reinforce human relationships and group consciousness, raise employee
competence and achieve culture change; therefore it acts as the catalyst for the implementation of
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TQM (Oakland and Oakland, 1998; Palo and Padhi, 2005). Hoogervorst et al. (2005) observed
that quality of human resource plays an important role in the implementation of TQM. Yang
(2006) found that HRM practices have a significantly positive effect on the implementation of
TQM. Jung et al. (2009) have observed that human resource-based TQM elements have stronger
influence on continuous improvement of performance than technology-based TQM elements.
Implementing HRM practices can also have a significant effect on employee and customer
satisfaction. It also positively affects employees’ quality awareness and corporate image.
TQM focuses not only on the quality of product, but also on the quality of employees. TQM
implementations depend heavily on changes in employees’ attitudes and activities. The
employees who are affected most directly are those who are the agents of change in
implementing TQM or other programs for continuous quality improvement (Karia and Asaari,
2006). Butler (1996) found that companies that used TQM practices achieved improvements in
employee satisfaction, attendance, turnover, safety, and health. When fully implemented, TQM
brings benefits to organization in terms of quality, productivity, and employee development
(Lawler et al., 1995) through improved teamwork, creativity, innovation, training,
communication, trust, and decision making. Employee training is a very important tool for
promoting and developing skills related to an organization’s beliefs and values to change to a
culture that places high value on quality (Rad, 2006). Karia and Assari (2006) studied that there
are four factors which helps in employee involvement for implementation of TQM. These factors
are job satisfaction, job involvement, career satisfaction and organizational commitment. TQM is
based on the assumption that the employees who are closest to the daily operating procedures are
in the best position to understand and improve the quality of those procedures. It aims to create
an environment in which positive relationships exist between managers and employees and in
which people feel motivated to do their best (Karia and Assari, 2006).
2.4 Customer Orientation
Customer focus is one of the most accepted precepts of TQM, observed and discussed by the
majority of quality gurus and TQM researchers. Customer orientation and meeting customer
requirements is one of the basic principles underlying TQM as a generic approach to the
management of organizations, and is frequently mentioned in the work of all quality
management gurus. Customer orientation provides a common goal for all organizational
activities and members, and incorporates both quality of design and conformance to quality
specifications (Hill and Wilkinson, 1995). According to Williams et al. (2001), leading
organizations transform themselves from internally focused TQM to a customer-focused
business structure. Dale et al. (2001) provided a baseline for the advancement of TQM theory in
which customer focus as well as management by fact, process orientation, and teamwork are
considered the most important factors. The basic principle of TQM is to achieve customer
satisfaction and continuous improvement. The key to successful implementation therefore begins
with the identification of key customer satisfaction variables (CSVs), such as price, performance,
reliability, service, durability, appearance and added features (Soltani et al., 200
4).
2.5 Information Technology (IT)
Information technology takes care of mundane and routine tasks like data input, computation,
measurement and output. Users can concentrate their effort on fulfilling the more important
objective of quality improvement by IT applications (Ang et al., 2000). Phusavat et al. (2007)
asserted that the increasing competition has given the greater role of information technology in
which the customers are able to convey higher demands such as lower cost, higher quality,

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reliability and with better market delivery. Information technology works as an enabler of the
structural adjustments of the organization to TQM changes. Information systems have become an
integral part of most organizations (Au and Choi, 1999). Other tools/concepts likely to be
implemented are group decision making, process analysis, benchmarking, statistical process
control and concurrent engineering (Siddiqui and Rahman, 2007). According to Mjema et al.
(2005), information technology and information systems generated quality tools such as pareto
charts, histograms, statistical process control and flow charts helped to control work process in
production and to deliver consistent product quality. According to Bandyopadhyay (2003),
information technology helps to manufacturers striving to achieve ISO 9000/QS-9000
registration which involves gathering, analyzing and documenting enormous amount of quality-
related information. Han et al. (2009) have also observed that integrated IT and integrated
logistics management improved the quality management practices of the pork processors.

2.6 Supply Chain Management (SCM)
SCM has been associated with modern materials management, advanced information
technologies, rapid and responsive logistics service, effective supplier management, and
increasingly with customer relationship management (Fawcett and Magnan, 2002). It should be
noted that for maintaining good supplier relations, teamwork among supply chain partners is a
cornerstone of TQM. TQM is a management philosophy that encourages cost reduction, the
creation of high quality goods and services, customer satisfaction, employee empowerment, and
the measurement of results. TQM can enhance communications along the supply chain through
enhancement of quality in ERP, partnership development, and CRM (Madu and Madu, 2003).
According to Lee and Kincade (2003), there are six major dimensions of supply chain
management. These are partnership, information technology, operational flexibility, performance
measurement, management commitment and demand characterization. TQM enablers such as
training and education, cross-functional teams, communication, teamwork, empowerment, job
satisfaction and technological support can impact any one or all of the six major dimensions of
SCM. In integrated business processes of SCM, TQM enablers could play a major role in
promoting effective integration of suppliers and customers along the value chain. Therefore,
effective implementation of TQM major factors such as training and education, employee
empowerment, top management support/leadership, organizational structure, performance
measures and technology are required for success of supply chain management.

2.7 ISO 9000
The ISO 9000, set of international standards were created in 1987 with the objective of
standardizing quality systems. Generally, organizations are implementing ISO 9000 standards to
achieve improved quality and efficiency, improved communication, competitive advantage, an
increase in market share, reduced costs and a higher stock price (Najmi and Kehoe, 2001; Zhang,
2000). The ISO 9000 standards are based on concept that certain minimum characteristics of
quality management system could be usefully standardized, giving mutual benefit to suppliers
and customers, and they focus on process rather than product quality (Van der Wiele et al., 2000;
Withers and Ebrahimpour, 1998). ISO 9000 is a management control procedure (Yahya and Goh,
2001), which involves a business documenting process of design, production, distribution to
ensure that the quality of the products and services meets the need of customers (Quazi et al.,
2002; Pun et al., 1999). The positive or optimistic view is based on the fact that the standards’
implementation helps to improve internal organization and operation, internal and external
communication through clearly defined duties and responsibilities, employee’s awareness of
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quality issues, quality variations and the related quality costs, and customers’ satisfaction and
trust through improved product conformance (Williams, 1997). ISO 9000 certification can be
used as the “first” but not the “last” step towards quality improvement. Although the standard’s
implementation helps companies to achieve an initial improvement in their quality performance,
it cannot guarantee that this improvement continues after certification.
Many research shows that ISO 9000 is different than TQM. According to Laszlo (1996), ISO
9000 and TQM are totally different approaches, where ISO 9000 implementation is associated
with line workers, while TQM is more related with top management. Moreover, the focus of ISO
9000 is on proving compliance and gaining certification, while TQM focus on continuous
improvement and achieving and maintaining customer satisfaction. Furthermore, Yung (1997),
in differentiating between ISO 9000 and TQM, claims that the concept of TQM is broader and
deeper than ISO 9000. TQM is identified to be for internal organizational use and tends to go
beyond customer satisfaction, while ISO 9000 is only for external assessment needs.

3. TOTAL QUALITY MANAGEMENT IN SME’s
Quality has become the basis of global competition for all firms regardless of location and size.
Small firms are very different to large ones in many areas, such as management style, production
processes, available capital, purchasing practices, inventory systems, and negotiating power
(Ahire and Golhar, 1996; Lee and Oakes, 1995). According to Yusof and Aspinwall (1999), total
quality management (TQM) is a philosophy mainly dominated by large companies but the fear of
losing contracts prompts SMEs to bring quality into their system.
Today, SMEs are at the center of interest in the quality debate for several reasons. One,
according to Wiele and Brown (1998), is that larger organizations will not be able to improve the
quality of their products, services and processes, unless their suppliers or the second-tier
suppliers also grow to higher level of quality maturity. Amongst these suppliers there are many
SMEs. SMEs have their own unique characteristics that differentiate them from larger firms.
Yosuf and Aspinwall (1999) have divided the characteristics of SMEs in to five categories i.e.
structure, systems and procedures, culture and behavior, human resources, markets and
customers. According to Hartz and Kanzi (1998), SMEs can be characterized as easy to survey
and understand, having short lines of communication and flexibility in relation to the
implementation of new management philosophies and approach. Lee and Oakes (1995) argue
that if top management is convinced of the need for TQM, then it is easier for managers to
inspire and motivate others in the organization. Because organizational systems and structures
are simple in SMEs, the process of TQM implementation can be made visible more easily.
According to Ghobadian and Gallear (1996), visibility of leadership and improvement teams are
easier in SMEs. Employees are closer to the products and services and thus feel more responsible
for quality, and they will have a better understanding of service and the overall profitability of
the organization and also decision-making processes are simple in SMEs as compared to large
firms. SMEs can also gain competitive advantage through the quality of their products because
they can implement JIT system with low defect rates or higher quality of products. It will also
help in reducing product cost through eliminating scrap and rework (Fullerton and McWatters,
2001).
For effective implementation of TQM, SMEs must include strategy finalization which
assesses structure and infrastructure, before policies are formulated and deployed (Ghobadian
and Gallear, 1997). Some of the TQM elements and programs appear to be more compatible with
small manufacturers. Some TQM benefits may be relatively more significant to small firms.
Some of the observations of the researchers in this context are given in table 1.
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Table 1: Total Quality Management in SMEs

Sr. Researcher Year Key Findings
No.
1. Barrier 1992 Key to survival for SMEs.
2. Henricks 1992 Small companies are advised not to implement TQM all at once.
3. Henricks 1992 Difficult to afford expensive consultants.
4. Brown 1993 Seven basic quality-improvement tools generally poorly supported in
SMEs.
5. Moreno-Luzon 1993 Small firms lag behind big ones in the application of TQM.
6. Azzone and 1993 Some quality related investments in large firms are rendered
Cainarca unsuitable for small firms.
7. Moreno-Luzon 1993 Problems of small firms in developing a quality culture are resistance
to change, lack of experience in QM, lack of resources.
8. Simons and Kerr 1993 The role of the smaller firms as suppliers to the larger firms places a
substantial burden on the small companies.
9. Goh and Ridgway 1994 TQM and its benefits are out of SMEs league.
10. Shrivastava 1995 Competitive advantage can derive by harnessing existing capabilities
in areas such as quality management.
11. Ghobadian and 1996 The lack of product quality from SMEs adversely affects the
Gallear competitive ability of the larger organizations because SMEs are their
suppliers.
12. Chittenden et al. 1996 Impetus to attain certification comes not from a desire to improve,
but from pressure by large companies.
13. McTeer and Dale 1996 Elapsed time amount and paper work are major drawbacks in
installing the new system (TQM) by SMEs.
14. Haksever 1996 Lack of experience, knowledge, finance, human resources and time
are the main problems to implement TQM in SMEs.
15. Quazi and Padibjo 1997 ISO 9000 certification is a stepping stone towards TQM.
16. Negri 1997 Italian SMEs prioritize process capability for quality improvement.
17. Struebing and 1997 Lower costs of implementing and maintaining TQM in SMEs.
Klaus
18. Boon and Ram 1998 TQM practices are organizational quality policies developed in the
planning phase and deployed in the implementation stage.
19. Yusof and 1999 Training and education is one of the most important items on the
Aspinwall agenda for small businesses in adopting TQM.
20. Yusof and 2000 TQM should not be implemented at the expense of losing flexibility
Aspinwall which is strength in small businesses.
21. Hendricks and 2001 Financial performances depend on effective implementation of TQM.
Singhal
22. Pun 2002 The implementation of TQM involves a fundamental change in
conducting business.
23. Neergaard 2002 TQM can foster continual improvement (CI) through integrated,
consistent, and involving everyone and everything in SMEs.
24. Temtime 2003 Continuous planning and quality improvement a prerequisite for the
survival of not only large firms but also for SMEs.
25. Lewis et al. 2005 The potential benefits that could be derived from TQM criteria were
lacking in the areas of Top management commitment and Gap
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analysis.
26. Sila and 2005 Leadership and information analysis play a significant role in shaping
Ebrahimpour the quality focus of companies.
27. Demirbag et al. 2006 Market orientation has a positive and significant impact on
organizational performance through only a mediating role of TQM
implementation in SMEs.
28. Kumar and 2008 Lack of knowledge or understanding of the system and limited
Antony resources are the main reasons for failures of six sigma in
SMEs.

4. EFFECT OF TQM IN ORGANIZATION PERFORMANCE
Today growing number of companies uses TQM practices as strategic foundation for generating
a competitive advantage and improving organizational performance. The importance of quality
for company’s performance and success on the market is widely recognized in business.
Performance measurement is very important for the effective management of an organization.
TQM is a holistic approach to improve quality, productivity and competitiveness in the
international marketplace. According to Projogo and Sohal (2004), organizational performance is
measured from quality performance (e.g. reliability, performance, durability and conformance to
specification) and innovation performance (e.g. product and process innovation). Lin et al.
(2005) studied that organizational performance will be measured in two categories, which is
satisfaction level and business results. Satisfaction level of organizational performance includes
employee satisfaction, customer satisfaction and supplier satisfaction.
Yoo et al. (2006) indicates that higher levels of employee empowerment lead to higher level of
organizational performance. So employee satisfactions have a positive influence on
organizational performance. Gaining a better understanding of customer needs and the use of this
knowledge to produce a better product has a direct impact on organizational performance. The
relationship between buyer and supplier is an important factor in organizational performance.
The need to improve supplier’s quality and delivery performance while at the same time,
reducing the costs of supplied materials and parts has motivated buyers to engage in supplier
development activities, which has a direct impact on organizational performance (Krause et al.
1998). Another level of organizational performance, business results comprise four items:
productivity, number of successful new product, cost performance, and profitability. TQM
practices also help to improve in reducing scrap, rework and stable the production process. These
in turn minimize the production cost and increase productivity (Ahmad and Schroeder, 2002).
Through continuous improvement, not only errors and defects can be prevented but also product
cycle’s times can be reduced, thereby improving productivity and organizational performance
(Huang and Lin, 2002). According to Buzzel and Gale (1987), financial performance or
profitability is an important measure of TQM outcomes. Quality improvement leads to
elimination of waste, reduction of cost and increase of profit. According to Kumar et al. (2009),
TQM has positive impact on company performance i.e. employee relations, operating
procedures, customer satisfaction and financial results. Han et al. (2009) have also observed
direct relationship between quality management and firm performance.

5. FAILURES OF TQM
In practice, TQM benefits are not easy to achieve. Several researchers reported the positive
impact of TQM on employee performance and satisfaction, quality performance, business
10


results, productivity and competitiveness in only 20 to 35 percent of the firms that have
implemented it (Gatchalian, 1997). Hoogervorst et al. (2005) observed that there are two major
reasons responsible for limited success of TQM. First reason is TQM rests on crucial
contributions of employees, which is incompatible with the traditional, mechanistic view on
organizing. This creates a fundamental mismatch between TQM intentions and the dominant
logic the organization is using. The second reason for failures regards inconsistency and
incoherence of employee behavior. According to Rad (2006), failure of the TQM is due to lack
of consistent senior management commitment and support, leadership style of managers,
superficial knowledge of the implementers of TQM, lack of a formalized strategic plan for
change, vague improvement goals, unclear strategies and conflicting priorities, lack of
developing and sustaining a quality oriented culture, lack of employees’ motivation, participation
and team working, employee apathy and resistance to change, lack of linkages between
remuneration and firm’s performance. There is also a lack of recognition for success, lack of
training, education and technical knowledge and experience about TQM, poor coordination,
close vertical communication, lack of work discipline. Lack of resources and support, financial
crisis, an organizational approach, a long-term focus and failure in understanding the voice of the
customer also affect TQM success (Rad, 2006).

6. SUMMARY AND GAPS DENTIFIED FROM THE LITERATUR

This paper has tried to review various issues of TQM from the literature available. Author has
reviewed about 120 research papers from reputed international/national journals such as
International Journal of Quality and Reliability Management, The TQM Journal, Journal of
Management, Asia-Pacific Journal of Quality Management, International Journal of Operations
& Production Management, International Journal of Production Economics, International Journal
of Automotive Industry and Management, Supply Chain Management: An International Journal
etc. Major areas considered in this paper are role of top management support, organization
culture, human resource management, employee involvement, customer orientation, supply chain
management, ISO 9000, information technology, in implementation of TQM. This paper has also
summarized TQM issues in SMEs and effect of TQM on performance of organizations. It has
been observed that in most of the cases, TQM helps in improving the performance of
organizations. It has been also observed that in many cases TQM has not been very successful.
Reasons for failure may vary from company to company. All issues reviewed in this paper and
their salient points are summarized in table 2.
Although TQM had been very popular area for the research in the past but many of the gaps still
exist in the literature. Some of the gaps identified from the literature on which further research
can be carried out are:
• Development of frameworks for evaluating effectiveness of total quality management in
manufacturing and service sectors.
• Comparison of TQM issues between manufacturing and service sectors.
• Framework for implementing TQM in SMEs.
• Optimization of variables for maximization of TQM performance.
• Prioritization of critical success factors for success of TQM.
• Integration of TQM and information systems in supply chain.
• Effect of quality management practices on performance of supply chains.

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Table 2: Summary of issues Related to Total Quality Management (TQM)

Sr. No. Areas of strategy development References
1. Leadership/Top management support Ahire et al. (1996), Hamlin et al. (1997), ISO
• Group of people helps in quality performance (2000), Pun (2001)
• Control of an organization or quality
management system
2. Organization culture Waldman (1993), Chowdhury and Menon
• Improve different organizations activities (1995), Sigler and Pearson (2000), Rad
• Develop quality management Practices (2006), Mohamed and YuanJian (2008)
3. Human resource management Lawler et al. (1995), Butler (1996), Oakland
• To motivate members of an organization and Oakland (1998), Palo and Padhi (2005),
• Make strategy for employee development and Hoogervorst et al. (2005), Mjema et al.
customer satisfaction
(2005), Rad (2006), Karia and Assari (2006),
• Employee attitude and activities
• Organizational commitment
Yang (2006)
4. Customer orientation Williams et al. (2001), Dale et al. (2001),
• Customer satisfaction Soltani et al. (2004)
• Continuous improvement
5. Information technology Au and Choi (1999), Ang et al. (2000),
• Help in different quality related tools Bandyopadhyay (2003), Siddiqui and Rahman
• To improve quality or high quality (2007), Phusavat et al. (2007)
• Reliability
6. Supply chain management Fawcett and Magnan (2002), Madu and Madu
• Maintaining supplier relationship (2003)
• Teamwork among supply chain partners

7. ISO 9000 Williams (1997), Withers and Ebrahimpour
• Help in quality, efficiency and (1998), Pon et al. (1999), Zhang (2000), Van
communication der Wiele et al. (2000), Najmi and Kehoe
• Increase market share and higher stock price (2001), Quazi et al. (2002), Tsiotras (2006)
8. TQM in SMEs Lee and Oakes (1995), Hartz and Kanzi
• Improve quality of product and services (1998), Wiele and Brown (1998), Fullerton
• Reducing product cost and McWatters (2001)
• Implementation of new management
• Philosophies and approach
9. Effect of TQM on performance Buzzel and Gale (1987), Ahmad and
• Financial performance Schroeder (2002), Huang and Lin (2002)
• Employee relations Karuse et al. (1998), Projogo and Sohal
• Operating procedure (2004), Lin et al. (2005), Yoo et al. (2006),
• Customer satisfaction
Kumar et al. (2009)
10. Failures of TQM Hoogervorst et al. (2005), Rad (2006)
• Crucial contributions of employees
• Inconsistency and incoherence
• Lack of knowledge

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7. CONCLUDING REMARKS
Total quality management has become more important than ever due to the age of globalization
and changing customer demands. Present study has tried to explore different issues related with
total quality management. It has been observed that major factors effecting TQM are top
management support, organization culture, human resource management, employee involvement,
customer orientation etc. TQM plays important role in success of modern advanced management
approaches such as six sigma, JITs and supply chain management. Based on literature review,
this paper has identified many gaps in TQM research. Therefore further study can be conducted
to explore these issues such as development of frameworks for evaluating effectiveness of total
quality management in manufacturing and service sectors, comparison of TQM issues between
manufacturing and service sectors, role of TQM in supply chain management, framework for
implementing TQM in SMEs etc. Empirical studies to compare TQM issues between developed
and developing countries can be also carried out as a future scope.

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enterprises: survey results”, Total Quality Management, Vol. 11 Nos. 4-6, pp. 448-62.
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understanding the fundamentals through examples of best practice applications – Part-
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About the Author
Dr. Rajesh K Singh is Associate Professor at Indian Institute of Foreign Trade (IIFT), Delhi,
India. He has published about 45 research papers in reputed international journals and
conferences. His areas of interest include competitiveness, small business management, Quality
Management and Supply Chain Management. He has published papers in journals such as
Singapore Management Review, International Journals of Productivity and Performance
Management, International Journal of Automotive Industry and Management. Competitiveness
Review: An International Journal, International Journals of Services and Operations
Management, Global Journal of Flexible Systems and Management, International Journals of
Productivity and Quality Management, South Asian Journal of Management, Productivity, IIMB
Management Review and Productivity Promotion.

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